Self-efficacy is the belief that one has the capabilities to execute the courses of actions required to manage prospective situations. Unlike efficacy, which is the power to produce an effect (in essence, competence), self-efficacy is the belief (however accurate) that one has the power to produce that effect.

It is important here to understand the distinction between self esteem and self efficacy. Self esteem relates to a person’s sense of self-worth, whereas self efficacy relates to a person’s perception of their ability to reach a goal. For example, say a person is a terrible rock climber. They would likely have a poor efficacy in regards to rock climbing, but this wouldn’t need to affect their self-esteem; most people don’t invest much of their self esteem in this activity. [1]

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The concept of self-efficacy is the focal point of Albert Bandura's social cognitive theory. By means of the self-system, individuals exercise control over their thoughts, feelings and actions. Among the beliefs with which an individual evaluates the control over his/her actions and environment, self-efficacy beliefs are the most influential arbiter of human activity. Self-efficacy – the belief in one's capabilities to organize and execute the courses of action required to produce given attainments – is constructed on the basis of the four most influential sources: enactive attainment, vicarious experience, verbal persuasion and physiological as well as emotional factors.
Self-efficacy plays the central role in the cognitive regulation of motivation, because people regulate the level and the distribution of effort they will expend in accordance with the effects they are expecting from their actions.

People will be more inclined to take on a task if they believe they can succeed. People generally avoid tasks where their self efficacy is low, but will engage in tasks where their self efficacy is high.

People with a self-efficacy significantly beyond their actual ability likely overestimate their ability to complete tasks, which can lead to irreversible damage. On the other hand, people with a self efficacy significantly lower than their ability are unlikely to grow and expand their skills. Research shows that the ‘optimum’ level of self efficacy is a little above ability; which encourages people to tackle challenging tasks and gain valuable experience.

Motivation

People with high self efficacy in a task are more likely to expend more effort, and persist longer, than those with low efficacy. On the other hand, low self efficacy provides an incentive to learn more about the subject. As a result, someone with a high efficacy may not prepare sufficiently for a task.

Thought patterns & responses

Low self efficacy can lead people to believe tasks are harder than they actually are. This often results in poor task planning, as well as increased stress. Observational evidence shows that people become erratic and unpredictable when engaging in a task in which they have low efficacy. On the other hand, people with high self efficacy often take a wider picture of a task in order to take the best route of action. People with high self efficacy are shown to be encouraged by obstacles to greater effort.

Self efficacy also affects how people respond to failure. A person with a high efficacy will attribute the failure to external factors, where a person with low self efficacy will attribute failure to low ability. For example; a person with high efficacy in regards to mathematics may attribute a poor result to a harder than usual test, feeling sick, or lack of effort. A person with a low efficacy will attribute the result to poor ability in mathematics. See Attribution Theory for more on attributions.

Bandura successfully showed that people of differing self efficacy perceive the world in a fundamentally different way. People with a high self efficacy are generally of the opinion that they are in control of their own lives; that their own actions and decisions shape their lives. On the other hand, people with low self efficacy see their lives as somewhat out of their hands.

"Children cannot be fooled by empty praise and condescending encouragement. They may have to accept artificial bolstering of their self-esteem in lieu of something better, but what I call their accruing ego identity gains real strength only from wholehearted and consistent recognition of real accomplishment, that is, achievement that has meaning in their culture." (Erik Erikson)

This is a process of comparison between a person and someone else. When a person sees someone succeeding at something, their self efficacy will increase; and where they see people failing, their self efficacy will decrease.

This process is more effectual where the person sees themselves as similar to their model. If they see a peer whom they perceive to have similar ability succeed, this will likely increase their self efficacy.

Although not as influential as past experience, modelling is a powerful influence when a person is particularly unsure of themselves.

3. Social Persuasions

Social persuasions relate to encouragements/discouragements. These can have a strong influence – most people remember times where something said to them severely altered their confidence.

Where positive persuasions increase self efficacy, negative persuasions decrease it. It is generally easier to decrease someone's self efficacy than it is to increase it.

4. Physiological Factors

In unusual, stressful situations, people commonly exhibit signs of distress; shakes, aches and pains, fatigue, fear, nausea, etc. A person's perceptions of these responses can markedly alter a person's self efficacy. If a person gets 'butterflies in the stomach' before public speaking, a person with low self efficacy may take this as a sign of their own inability; thus decreasing their efficacy further. Thus, it is the person's belief on the implications of their physiological response that alters their self efficacy, rather than the sheer power of the response.

A theoretical model of the effect of self-efficacy on transgressive behavior was developed and verified in research with school children. Feelings of self-efficacy with respect to school work, interpersonal interactions, and self-regulation influenced prosocial behavior and whether or not a child could avoid moral responsibility.

These two factors influenced whether a child was preoccupied with grievances and feelings of anger. Whether or not a child engaged in transgressions (aggression, cheating, etc.) was influenced by each of these factors.

Self-regulatory self efficacy and academic self efficacy have a negative relationship with moral disengagement which is making excuses for bad behavior, avoiding responsibility for consequences, blaming the victim.

Social Self-Efficacy has a positive relationship with prosocial behavior which is helping others, sharing, being kind and cooperative. On the other hand, moral disengagement and prosocial behavior has a negative relationship.

Three types of self-efficacy are positively related.

When we are talking about a negative relationship, it simply means that the higher the individual’s academic self-efficacy, the less his or her moral disengagement.
When we are talking about a positive relationship, it means that the higher the individual’s academic self-efficacy, the more he or she engages in prosocial behavior.